The performance review maintained a neutral 1H19 performance in line with our expectations of Shenwan Hongyuan's 1H19 revenue of +73% to 10.48 billion yuan, net profit of +55% year-on-year to 3.20 billion yuan, corresponding to 2Q19 net profit +25% /-28% month-on-month to 1.34 billion yuan, which is in line with the performance report. In addition, net assets were +19.3% yoy to $805.1 billion (H-share IPO financing of HK$8.9 billion was completed in the first half of the year); 1H19 annualized return on net assets was +2.4ppt to 8.7% yoy; and business and management fees were -19.2ppt to 34.7% yoy. The trend of investing in business is the main reason for improving performance. Excluding interest income from other bonds and bonds for the same period of the year, 1H19 investment income was +204% year-on-year to $2.97 billion, accounting for 37% of adjusted total income (excluding commodity trade income). The size of transactional financial assets was +5% compared to the beginning of the year to 99.2 billion yuan, and the corresponding annualized investment yield was +3.1ppt to 6.1% year-on-year; in terms of asset structure, bonds: funds: stocks: others = 54%: 22%: 22%: 22%. The brokerage business underperformed the industry. 1H19 brokerage revenue was +12% yoy to $2.13 billion (vs. market stock trading volume +28% yoy). We expect that the company's commission rate and share may be under downward pressure. In addition, institutional brokers remained steady, with revenue of 220 million yuan, ranking second. Revenue from the investment banking business improved under a low base for the same period last year, but the underwriting share still declined. Investment bank revenue was +34% year over year to 540 million yuan. The market share of corresponding stock underwriting was -1.0ppt to 0.8% year on year, and the market share of bond underwriting was -0.2ppt to 0.3% year on year. Interest income on financing is adjusted with the market. On a comparable scale, net interest income was -28% year-on-year to 1.4 billion yuan, of which: interest on the two loans was -11% to 1.83 billion yuan (year-end balance of 48.3 billion, market share of 5.3%), and equity interest ratio -21% to 1.16 billion yuan. The stock quality scale was -26% at the beginning of the year to 32.3 billion yuan, a decline higher than that of the industry. In addition, the additional stock quality for the current period is estimated at ~ 200 million yuan, and impairment preparations at the end of the period accounted for ~ 2.5% of the balance. The scale of active management in the asset management business has been rising steadily, and revenue has declined. Asset management revenue was -24% year over year to 550 million yuan, and the average monthly active management scale during the reporting period was 143 billion yuan (+4% compared to 4Q18). In terms of fund companies, Shenwan Lingxin (67% of shares) 1H19 made a profit of -43% year-on-year to 30.8 million yuan, and Wells Fargo Fund (holding 28% of shares) made a profit of +10% to 380 million yuan. Profit Forecast and Valuation Due to adjusted return on investment assumptions, we lowered net profit in 2019/2020 by 3.7%/4.1% to 5.92 billion yuan/6.47 billion yuan. Currently, A shares correspond to 1.46 times /1.38 times P/B in 2019/2020; maintain a neutral rating and target price of 4.68 yuan, corresponding to 1.43 xP/B in 2019, and have a 2% downside compared to the current stock price. Risk trading volume declined markedly, stock/bond markets fluctuated sharply, and credit risk exposure exceeded expectations.